Page 10 - Annual Report English 2018
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Tycoons Worldwide Group (Thailand) Plc.
B. Fastener:
TYCN is a professional fastener manufacturer providing a variety of fasteners
and satisfying customers’ need of one-stop purchase.
5.Customer satisfaction
The company evaluates customer satisfaction on each product in the beginning of
each year. In terms of the valuation of customer satisfaction in 2018, the company
set the score of no less than 80 for service quality, product quality, and delivery
process. Overall, every product passed the evaluation.
2.2.2 Market and competition
Dumping and Capacity cut of China
Due to China’s economic slowdown, steel oversupply and subsidies to steel exports,
Chinese steel products have been dumped all around the world, which not only made
TYCN’s product price less competitive than imported materials, but also forced
domestic customers to purchase more imported products. Overseas market also
suffered from Chinese low-price dumping, which made exports a difficult situation.
Fortunately, a series of specific plan for steel capacity cut in China has become
effective since the beginning of 2016. This plan will cut capacity of between 100
million and 150 million tons within three to five years, and meanwhile proceed with
steel producers’ restructures and M&As. According to NBS of China, by the end of
2016, 65 million tons has been cut ahead of schedule; while in 2017 and 2018, 55 and
30 million tons has been cut, which means the plan has been achieved ahead of
schedule.
Although China has cut 150 million tons of capacity with 3 years of effort, reform of
supply side has not been completed. In 2019, China will focus on the prevention of
recovery of resolved capacity as well as new capacity. According to WSA's forecast in
Oct., 2018, global demand of steel will reach 1.68 billion tons in 2019, a 1.4% growth
from 2018.
Rise in trade protectionism
In response to China’s huge increase in steel exports, trade protectionism has risen
around the world and many governments have taken protective actions such as
imposing anti-dumping tariff, imposing import quota, and introducing surveillance
system for import and export. TYCN’s fastener products, therefore, got to hold a
significant share in European market. However, China’s protests and counteractions
has finally made the EU to halt anti-dumping tariffs on fastener products from China,
further making China a major competitor again in European market, which will
negatively affect TYCN’s sales. Fortunately, TYCN will not be easily replaced by
China’s low-cost manufacturers in a sense that TYCN has cultivated European market
for years and it has also been known for its high-quality products and on-time delivery.
Besides, European fastener producers will be highly likely to file new anti-dumping
against Chinese fastener imports if Chinese producers sell them at low prices again.
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